Question: Why is the allowance method preferred over the direct write-off method of accounting for bad debts? Allowance method is used for tax purposes Improved matching

Why is the allowance method preferred over the direct write-off method of accounting for bad debts?

Allowance method is used for tax purposes

Improved matching of bad debt expense with revenue

Estimates are used

Determining worthless accounts under direct write-off method is difficult to do

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